THERE was bad news for Welsh small creditors of Connaught yesterday as it emerged that it could owe twice as much money as was originally thought.

KPMG, appointed as administrators 10 weeks ago, said management accounts led it to believe the social housing arm of Connaught owed £46m to thousands of unsecured creditors, ranging from a rugby club to a dairy supplier.

But as they compiled a creditors’ report, the administrators discovered thousands of supplier invoices that had not been processed and now believe debts could rise to as much as £100m.

David Costley-Wood, joint administrator and restructuring partner at KPMG, said: “We were surprised at the level of backlog of invoices that had not been processed for a listed company.”

Connaught, which had contracts with RCT Homes and Valleys to Coast Housing in Bridgend and St Asaph-based Clwyd Alyn Housing Association, was thrown into turmoil after warning in June that Government cuts would hit revenues. Some 1,400 employees were made redundant when KPMG were brought in – though 4,200 jobs were originally at risk.

The firm also left trade creditors – such as PTS Plumbing Trade Supplies, Jewson and Travis Perkins – nearly £57m out of pocket and owed HM Revenue & Customs £21.7m.

The creditors’ report also showed there was only £600,000 available to the unsecured creditors – meaning they are likely to recover less than one penny in every pound.

KPMG also said centrally- held employee records “proved to be unreliable and in a poor state”.

The administration of Connaught’s main division left around 280 contracts for councils and public sector bodies up in the air, and caused uncertainty for suppliers and contractors.

Rivals Morgan Sindall and Mears bought up the majority of contracts at Connaught Partnerships, saving thousands of jobs.

Connaught, which started in 1982 as a concrete repair specialist in Sidmouth, Devon, provides services to the environmental, social housing, public sector and compliance markets. The firm employed around 10,000 people across all its divisions before administration.